Canopy Growth Corp. of Smiths Falls, Ont., has formed a joint venture to share ownership of the Agripharm indoor growing operation in Creemore, Ont., with Amsterdam-based Green House Brands.
Canopy Growth (TSX:WEED) says it will retain 40 per cent of Agripharm and the rest will be owned by Green House Holdings North America Inc. and its affiliate in the Netherlands, which does business as Organa Brands.
The venture will create a new Canadian home base for Green House Brands and Organa while Canopy Growth has the right to purchase all the cannabis products produced by Agripharm for distribution through its Canadian system.
Green House Brands and Organa will also grant Canopy an exclusive, royalty-free licence in Canada to certain technology and intellectual property.
Green House Brands was formed in 1985 and was a pioneer in creating a European cannabis coffee shop market. It now operates in Europe, Africa, South America and North America.
Quebec seeks full pot control
Elsewhere in Canada, public pressure on the Quebec government was so strong it had little choice but to table a strict bill on marijuana legalization that will give the province full control over the industry, stakeholders and business officials said Thursday.
Bill 157 aims to push out the private sector and create a zero-tolerance policy for driving under the influence of all drugs.
"This is an important change to our society," Public Health Minister Lucie Charlebois told reporters. "The experts recommended we be prudent to start and then to see if we need to adjust. They asked us to be rigorous and to see how citizens evolve."
Under the bill, all cannabis cultivated in Quebec must be sold by the government, through a subsidiary of the provincially run liquor board, although the legislation gives the province flexibility to make exceptions.
It will also be illegal to cultivate cannabis for personal or commercial use, unless authorized by the government.
People of legal age will be allowed to possess up to 150 grams of cannabis in their home, and 30 grams on their person.
Yves-Thomas Dorval, president of Quebec's main employers' association, said he has no doubt the private sector would be able to sell marijuana effectively and responsibly if it were given the opportunity.
"That said, I also understand the state just couldn't go there at the moment," he said in an interview. "Given the enormous public pressure on this question."
A public opinion poll last May of 2,536 Canadians, including 1,017 Quebecers, indicated Quebec stood alone on the issue.
While 54 per cent of respondents in Canada as a whole favoured legalization, 54 per cent of Quebec respondents were against it, with one-third of those saying they were extremely opposed.
Prime Minister Justin Trudeau has promised Canadians marijuana will be legal by next July 1, and has left it to the provinces to create their own legal framework on how to enforce the law on their territory.
Quebec was originally reticent to go along with the marijuana plan, citing concerns from citizens that legalizing pot would encourage young people to pick up the habit and would foment social problems.
The province has also asked Ottawa several times to delay legalization by a year, but to no avail.
Ontario was the first province to announce its detailed marijuana plan, which includes the sale of the drug in up to 150 stores by 2020 run by the Liquor Control Board of Ontario.
Pierre Killeen, spokesman for Hydropothecary, one of only two Quebec producers licensed by Health Canada to produce medical marijuana, said citizens will need time to be comfortable with legal pot.
Under the bill, his company will no longer be allowed to sell directly to Quebec citizens, and instead will have to go through the provincial cannabis corporation.
"We understand this is new and there was considerable public pressure on the government to make sure they get this done right," he said. "Our expectation is that as people become familiar with recreational cannabis we'll see an opening of retail distribution in the province of Quebec."
The bill gives the Quebec government authorization to enter into agreements with First Nations communities to "adapt to their realities."
Chief Gina Deer of Kahnawake, a Mohawk territory south of Montreal, said her council has already put together draft legislation to assuage some of the fears in her community.
"As First Nations, we are all intergenerational trauma sufferers," she said. "Residential schools are one of the biggest things, and we have become a vulnerable population and addiction is a big concern for us."
Deer said her community is considering its own marijuana stores in order to control the cultivation and distribution on its territory.
"Anything that we do in our jurisdiction is going to be done under our authority," she said. "We don't want outside legislation superseding ours."
Finance Minister Carlos Leitao said Quebec will open 15 marijuana stores across the province by July 1 and will control sales online.
"We need to be flexible," he said, referring to the possibility of opening more stores. "We will see how the market evolves.
"What's clear is that there will be no cannabis sold in regular liquor stores."
The bill forbids anyone under 18 years old from possessing cannabis and prohibits anyone from consuming it where smoking tobacco is also illegal.
Bill 157 also introduces "a new principle of zero tolerance" regarding drivers caught under the influence of marijuana or any other drug.
"It prohibits anyone from driving a vehicle ... or having control of a vehicle if there is any detectable presence of cannabis or any other drug in their saliva," Charlebois said.
Those rules, however, will only come into force when the technology for roadside saliva tests is approved by the federal government, she added.
In the meantime, patrol officers are being trained for signs of impaired driving and have the right to arrest anyone suspected of driving under the influence of marijuana.
Alberta also announced on Thursday how it will deal with legalized marijuana. The province will control the online sale of pot to ensure minors can't buy it off the internet but the government will trust private operators to handle over-the-counter sales. As in Quebec, smoking cannabis will be prohibited in Alberta wherever tobacco use is banned.